China Southern Airlines (600029) 2018 Annual Report Comments: Performance Meets Expectations Double Hub Leader Set Off

China Southern Airlines (600029) 2018 Annual Report Comments: Performance Meets Expectations Double Hub Leader Set Off

Core point of view The strong disturbance of the oil price exchange rate dragged down the company’s performance, and the decrease in the deduction of foreign exchange profits narrowed to 11.


The company quickly promoted the “Guangzhou-Beijing” layout, and the dual hub leader set sail again.

Baiyun Airport always leads the front line in heavy volume, as the main base airline company may obviously benefit.

The expected demand for supply has improved, and the layout window may come.

In 2018, the company’s net profit attributable to its mother decreased by 55%, and the maximum decline in the deduction of foreign exchange profits narrowed to 11.


In 2018, the company realized operating income of 14.36 million yuan, a year-on-year increase of 12.

7%; realized net return / deduction of non-net profit is 29 respectively.

8 billion / 23.

400 million, down 49 every year.

6% / 55.

1%; the corresponding return is 0.

28 yuan, the gross profit margin was relatively reduced by 1.

9 to 10 pieces.


Among them, Q4 achieved a 10% increase in revenue.

8% to 347.

3 billion, net profit may be 11.

900 million, at least 2017Q4 may be 11.

The 400 million scale expansion may be caused by the decrease in Q4 demand company RASK by 1%.

Oilseed disturbances dragged down performance in 2018.


Domestic and international passenger-kilometer revenue also increased by 1.

9%, 5.

4%, load factor increased by 0.

2pct, the three rates will be reduced by 1.


The company’s ASK increased by 12 in 2018.

0%, the net introduction of 86 aircraft increased by 11.

4%, the growth rate of operation and investment is ahead of the three major airlines.

Passenger load factor increased by 0.

23pct to 82.

4%, of which domestic and international routes rose by 0.


26 points.

Passenger-kilometer revenue was more than flat, with domestic and international routes both increasing by one.

9%, 5.4%, international line revenue improved significantly.

The company’s operating costs increased by 15 in 2018.

2% to 1286.

100 million, higher than the growth rate of income 2.


Affected by exchange rate losses and an increase in average borrowing surplus, financial expenses have increased by an additional 355 per year.

7% to 51.

100 million, but 夜来香体验网 the three rates after deduction of foreign exchange fell by 1 year-on-year.

1 to 9.


In 2018, the company’s exchange loss was 1.7 billion, the price increase or contributed to nearly 70% increase in aviation fuel costs, and the cost of deducting fuel per unit kilometers was downgraded4.


The company’s exchange loss in 2018 was 17.

400 million significant drag on performance, the exchange gains in the same period of 201717.

900 million, a decrease of 35 previously.

3 billion.

As of March 28, the receipt of the exchange rate between the Japanese currency and the US dollar was 6.

74, an earlier appreciation of 2.

0%, contributing a positive improvement for the time being.

In 2018, the company’s jet fuel cost increased by 34.

6% to 429.

2 billion, the increase in jet fuel prices is expected to contribute nearly 70% increase.

The company’s oil deduction costs increased by 7 in 2018.

4%, the unit deduction cost of oil is reduced by 4 per year.

2% to 0.

27 yuan, cost control continues to advance.

The departure of the dual hub layout will benefit Baiyun Airport from time to time, and demand will improve or transition.

On March 6, the Civil Aviation Administration of China announced 10 international routes to Beijing Daxing Airport. The company quickly promoted the “Guangzhou-Beijing” dual hub layout, and the route network, especially the international route layout, may have improved significantly.

The average daily flight volume at the main base Baiyun Airport in the summer and autumn of the 2019 season increased by 4.

8 pieces to 6.

5%, always leading the first-tier airport.

The average daily volume of international flights at Baiyun Airport increased by 15.

3%, international acceleration companies may benefit significantly.

B737MAX8 has suspended airworthiness certification, and may account for more than 30% of the company ‘s net introduction of aircraft in 2019, for delivery or upgrade.

The adjustment of the Beijing World Garden Festival and the May Day holiday will stimulate or accelerate the improvement in demand. April may be the starting point for the upward trend of demand.

Risk factors: The macroeconomic downturn exceeded expectations; the RMB depreciated sharply; international oil prices have grown rapidly.

Earnings forecasts, estimates and investment ratings.

The oil exchange turmoil in 2018 dragged down the company’s performance, and the maximum decrease in foreign exchange deduction margins narrowed to 11.

We adjusted our net profit forecast for 2019-2021.
4 billion / 88.

600 million / 98.

1 ppm (previous forecast was 7.8 billion / 87 trillion in 2019-20, and it will be new in 2021), with a slight adjustment of 19/20/21 to 0.



80 yuan.

B737MAX8 may account for more than 30% of the company ‘s net introduction, which will benefit Baiyun Airport’s heavy volume at all times, and demand will improve or change.

Maintain “Buy” rating.